Why warehouses? Racetrack owners press case before judge

County defends decision to deny warehouses at shuttered Palm Beach International Raceway, says owner failed to show that circumstances have changed.

Administrative Law Judge Bram Canter

It took five minutes for retired Administrative Law Judge Bram Canter to announce that mediation had failed between Palm Beach County and the landowner seeking to build warehouses at the former Moroso racetrack. 

Then the real hearing began.

Landowner IRG Sports & Entertainment, owned by global investment firm Sixth Street, spent the bulk of a four-hour hearing Wednesday trying to show Canter how the Palm Beach County Commission erred when it denied IRG’s zoning request on Jan. 26.

And five supporters of the shuttered racetrack given standing to speak, among a crowd of about 80 supporters, stood to tell Canter why the commission made the right call. 

The hearing in County Commission chambers fell under the Florida Land Use and Environmental Dispute Resolution Act, meant to protect private property rights, after IRG petitioned for relief on Feb. 24.

Canter said he would rule by May 3 but the ultimate judge is the County Commission, which can accept or reject his decision. If the county rejects the warehouse plan for a second time, IRG can sue in Palm Beach County Circuit Court or refile its zoning application and try again.

In the first five minutes, to dispense with mediation, Assistant County Attorney Helene Hvizd told Canter that staff can’t alter the decision of the County Commission without public discussions with commissioners. IRG attorney Seth Behn said his clients wouldn’t back off their belief that they met all county requirements and should be approved. 

With no room for compromise, the judge moved to start the second phase of the hearing, in which he would offer a recommendation on how to resolve the impasse to the County Commission.

Palm Beach International Raceway
Racetrack supporters fill several rows at the hearing over allowing warehouses on the Palm Beach International Raceway site. (Joel Engelhardt photo)

Did they prove changed circumstances?

At the heart of the issue, the county and the racetrack supporters contend, is that IRG failed to show changed circumstances to support the change from racetrack to warehouse complex. Stating the need for more industrial in the county doesn’t cut it, the county wrote in a March 10 filing.

“The owners focus on unsubstantiated rhetoric about overall economic conditions,” the county wrote, citing sections of IRG’s application. 

It doesn’t matter that county staff said IRG met the “changed circumstance” condition because the staff recommendation came before the public hearing, in which dozens testified to a different set of facts, the county wrote. Additionally, the commission has the right to reject its staff recommendation, which it did. 

At the hearing, IRG witness George Gentile cited the widening of the Beeline Highway to enhance intrastate transportation as a changed condition. He also referenced “changed economic conditions.” 

Lobon of CBRE
Jose Antonio Lobon, a CBRE National Partners vice chairman, testifies Wednesday on behalf of IRG. (Joel Engelhardt photo)

Those changes, said witness Jose Antonio Lobon, a CBRE National Partners vice chairman, emerged from population growth.

“People need goods. Each marginal person requires additional goods,” he said. “It’s difficult to fulfill that need in South Florida.”

Warehouse plan on site of Palm Beach International Raceway on the Beeline Highway west of Seminole Pratt Whitney Road.

Warehouses valued at nearly $77 million

He pointed to the $291 million sale in June 2022 of Calder Race Course in Miami Gardens, with the buyer planning a complex featuring warehouses. He said he reviewed bids to buy IRG’s Palm Beach International Raceway and none of the “realistic bidders” proposed keeping it open as a racetrack.

“There’s an acute supply-demand imbalance in Palm Beach County,” he said, adding that qualified investors proposed “a state-of-the-art, Class A warehouse institutional park.”

IRG signed a contract to sell the 175-acre property to Portman Industrial in August 2021 but let the contract lapse after the county’s Planning and Zoning Board rejected the plan in April 2022.

Since that time, IRG’s real estate expert said, prices for warehouse land have fallen. 

IRG witnesses did not say how much Portman Industrial had agreed to pay.

Walter Duke
Walter Duke, a real estate appraiser and former mayor of Dania Beach, testifies Wednesday on behalf of IRG. (Joel Engelhardt photo)

But Walter Duke, a real estate appraiser and former mayor of Dania Beach, valued the property as a site for warehouses at $76.9 million. That’s $35 per square foot for nearly 2.2 million square feet of warehouse space. 

He said he added value because IRG planned to lease 450 outdoor parking spaces for large vehicles, drawing a rebuke from county planners, who said IRG didn’t seek permission to rent parking spaces. 

Duke valued the property at $10.9 million as it is now. He put IRG’s overall damages at $81.38 million if they can’t build warehouses.

appraised value
Walter Duke’s appraised values for the shuttered Palm Beach International Raceway site on Beeline Highway. (Joel Engelhardt photo)

IRG’s investment in racetrack

The witness who drew the most scorn from racetrack fans came last. 

Ari Mazo, an IRG board member and principal and senior credit underwriter with Sixth Street Specialty Lending Advisers, said IRG invested millions into the property when he oversaw track operations between 2017 and 2022. 

IRG's Ari Mazo
Ari Mazo, an IRG board member and principal and senior credit underwriter with Sixth Street Specialty Lending Advisers, testifies Wednesday. (Joel Engelhardt photo)

When asked by the judge to provide examples, he said IRG installed a new timing system on the drag strip at a cost of $50,000 to $60,000, maintained the pavement and bought other business to help boost traffic at the track formerly known as Moroso Motorsports Park.

“As the years went on and as participation in the track went down it became harder and harder to justify the investment,” Mazo said.

About the same time that IRG announced the sale of PBIR, it sold tracks in Memphis, Tenn.; Cordova, Ill.; and Mechanicsville, Md.

Racing fans say management refused to work with outside groups looking to bring racers to the track, such as Beat the Heat and Street Racing Made Safe. They said promotions and large-scale events aimed toward bringing more paying customers lagged. 

Palm Beach International Raceway
Cars line up to enter Palm Beach International Raceway on April 4, 2022. (Joel Engelhardt photo)

‘Not obligated to clean up their bad business decisions’

Jennifer Davis, a Loxahatchee resident who has fought the track closing for years, explained how she and her husband invested in racing and now face higher costs to travel to Orlando or Bradenton to race.

“We got into this sport because the track was right there,” she said.

She read three letters from operators expressing frustration with IRG’s management. 

Former PBIR General Manager Chris Harris said, “Fiscally speaking, if these grounds produced a multi-use facility that allowed drag racing, circuit track racing, karting, shopping, gambling, or a restaurant, this facility could be a significant profit center for the county, becoming a true tourist destination, generating significant tax dollars year-round for the county.”

She added that the County Commission “is not responsible for IRG’s profits and is not obligated to clean up their bad business decisions.”

Marc Weinthal of Murray’s Speed & Custom auto parts shop, who said his business is harmed by the closure, reminded the judge that “Their decision to shut down the track is not a changed site condition.”

Joe Castello, who does a racing podcast and spoke for the Sierra Club’s Drew Martin, said “There’s no better or higher use than keeping this as a racing facility. Warehouses are a necessity. We only have one racing facility.”

Zachary Boyajian, managing director for VP Racing Fuels Southeast, said the closure guaranteed more dangerous street racing, drawing a question from the judge who didn’t realize street racers would show up at the track. Almost every weekend, drivers of street cars lined up to race at PBIR’s quarter-mile drag strip for a small fee. Drivers could get in four or five runs in a single night.

Ken Zaron, speaking for longtime track supporter Madelyn Marconi, said destroying a Palm Beach landmark “is simply not a valid justification under the code,” and cited seven statutory provisions that he said IRG failed to meet.

He spoke about how he brought his son to the racetrack for two decades. 

“He wouldn’t be the person he was today if he wasn’t involved in this motor sport,” Zaron said.

Bram Canter
Lawyers huddle with retired Administrative Law Judge Bram Canter after the hearing Wednesday. Canter said he would rule by May 3. (Joel Engelhardt photo)

The final days at Palm Beach International Raceway

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© 2023 Joel Engelhardt. All rights reserved.

Author: Joel Engelhardt

Joel Engelhardt is an award-winning newspaper reporter and editor based in Palm Beach Gardens. He spent more than 40 years in the newspaper business, including 28 years at The Palm Beach Post. As a reporter, he covered countywide growth, the 2000 election and the birth of Cityplace in West Palm Beach. As an editor, he oversaw probes into the opioid scourge, private prisons, police-involved shootings and more. For seven years, he worked on the paper’s editorial board. Joel left The Post in December 2020. He and his wife, Donna, have lived together in Palm Beach Gardens since 1992.

2 thoughts on “Why warehouses? Racetrack owners press case before judge”

  1. Joel – thank you for following this story since it began. We appreciate your support in getting this story out there.

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